Unlike the critics, the Treasury has absorbed the main lesson from the past 30 years of academic finance research: asset price movements mainly reflect changes in investors’ collective attitude toward risk.

Perhaps the reason this insight has not penetrated, even among academic economists, much beyond the researchers responsible for documenting it, is that it has not been expressed in layman’s terms. Here’s a try: in the Wall Street contest between “fear” and “greed,” fear fluctuates much more than greed (in academic terms, movements in “risk tolerance” explain the bulk of movements in asset prices).

In thinking about economic crises, people have a tendency to contrast fundamentals versus psychology, dismissing so-called psychological factors as “not real” or somehow illegitimately interfering with the proper functioning of the economy. But the economy is not a machine with the humans being somewhat incidental to its operation (at least not yet). Insofar as human desire, priority, ambition, plans and beliefs about what the future holds are more foundational to the enterprise than the material constituents of the economy, psychology is fundamental. At some point, the economy gives way to society as the more fundamental unit of analysis.

This is not to say that the future-oriented plan makers don’t get “spooked” — hence Keynes’s “animal spirits” — and that they are irrational over the medium term to do so; but who can deny that retrenchment is not rational within certain limited considerations. That being said, it is the role of the government to defend the commons.

A bit of a discussion broke out at this morning’s session over Shane Legg and Marcus Hutter’s paper, “Universal Intelligence: A Definition of Machine Intelligence” (Minds & Machines, vol. 17, no. 4, 2007, pgs. 391-444, arXiv:0712.3329v1). Following the convention of abbreviated reference to a paper by its authors’ last names, and as Hutter is pronounced “hooter,” this paper is referred to as “legs and hooters.” So there was this back and forth, “As the legs and hooters paper shows …” “You should look more carefully at legs and hooters.” “It can be hard to get you head around legs and hooters.” “We shouldn’t rush to embrace legs and hooters.” I exaggerate slightly, but I would imagine that there are better papers than Legg and Hutter’s on the subject of the definition of machine intelligence; it’s just that those other papers get passed over in favor of one granting a computer nerd the opportunity to say “legs and hooters” in all seriousness in front of a room full of people. I’ll bet that Legg and Hutter decided to collaborate on the basis that such a winning name combination guaranteed their rocket-like ascension in the ranking of most oft cited papers.

S. and I are spending the weekend volunteering at the Artificial General Intelligence Conference 2009. Last night we saw organizer Ben Goertzel’s introductory talk and Jürgen Schmidhuber’s talk on various aspects of intelligence as compression and formalism in AGI (post-talk discussion, Goertzel left, Schmidhuber to the right). Today we attended Cognitive Architectures I and II and the poster session. Matthew Ikle and Ben Goertzel’s discussion of using formal economic models as a means to generate attention in the OpenCog framework and Eric Baum’s presentation on the relation between evolution and intelligence both blew my mind. I cant wait for these talks and their attendant slideshows to be up on the website.

For now the most interesting thing about the conference from the standpoint of a social scientist is the degree to which the organizer, Ben Goertzel is a Kuhnian revolutionary disciplinarian. His talk on the challenges of AGI was a perfect demonstration of the problems of prerevolutionary or pre-paradigmatic science. Pre-paradigmatic is the current state of AGI research and it would be an excellent candidate for history of science study as it will probably remain so for many years to come, but its revolution is coming.

It has gradually become clear to me the degree to which Mr. Goertzel is a leader in the field, by which I do not mean his role as an innovator — though he is definitely that — but that he is someone drawing the discipline together from its disparate strands and goading it on in its proper objectives. The problems that he identified in his opening talk — the lack of a common language, a dominate model shared by at least a plurality of researchers, a road-map for future problem identification, again, shared by at least a plurality, the lack of any metric of progress — are all classically Kuhnian problems. The conference obviously serves a number of objectives, many very traditional such as professional networking and facilitation of communication of findings. But unlike one might expect from a conference of a more mature science, there was a considerable amount of normative, discipline-definitional activity. First is the very conference itself. There is clearly no well-defined research area of artificial general intelligence. The bizarre diffusion of backgrounds and affiliations represented displayed no coherence or institutional establishment. Participants had backgrounds in neurology, cognitive science, anesthesiology, evolutionary biology, bioinfomatics, mathematics, logic, computer science and various strands of engineering. Creating the problem of a shared language, people had to be fluent in the languages of multiple disciplines and were mixing and matching as well as engaging in isolated terminological innovation. People worked as academics, corporate researchers and developers, engineers, entrepreneurs and so on.

Ill-definition means that things don’t cohere, or that what has come together naturally dissipates. It is in this sense that Mr. Goertzel is a disciplinary revolutionary. He really has a personal goal and a vision regarding AGI. At one point in his opening talk he actually delivered a brief bit of a lecture to conference participants on the problem of focusing on sub-general level intelligences for the expedience that they are achievable and money-making, though admitting to culpability in that respect as well. It is also clear what a small clique of researchers constitute the AGI world, as well as Mr. Goertzel’s position as a hub of the social and intellectual network. During the question and answer, he was able to call on most people in the room by first name. And he is clearly an intellectual celebrity with few peers. As Kuhn argued, non-scientific factors feature more prominently in the definition and direction of a science than rhetoric of objectivity would lead one to expect.

After any far-reaching junket to the library, I usually leave amazed at the flecks of brilliance lost by dint of the sheer mass of information that humanity churns out, like an ounce of gold alloyed in ton of oar. I often have the same feeling about the online world. For every one thing that goes viral, ten acts of genius are buried in someone’s quickly advancing feed.